IOC waiting on anti-siphoning changes

The IOC may struggle to clear $US100 million in Australia again.
Photo: Reuters

by
Neil Shoebridge

The International Olympic Committee’s plan to start negotiations with Australian media companies over the local rights to the 2014 and 2016 Olympics is being frustrated by the Gillard government’s tardiness in changing the sport anti-siphoning regime.

The IOC sold the United States TV and internet rights to the 2014 Winter Olympics in Sochi, Russia, the 2016 Summer Olympics in Rio de Janiero, Brazil, and the 2018 Winter and 2020 Summer Olympics to NBC Universal for $US4.38 billion ($4.11 billion) this month.

Media executives said IOC officials were keen to start negotiating the Australian rights to the 2014 and 2016 Games but could not start serious talks until the anti-siphoning changes went ahead.

The government made what one media executive described as a “high-level policy announcement" about changes to the anti-siphoning list in November but had not yet revealed further details or put forward new legislation.Industry sources said the changes might go to Parliament this week. “But we’ve heard for a while that the new legislation is coming and it has not appeared yet," one source said.

The local Olympics media rights holders are Nine Entertainment Co and pay TV operator Foxtel. They bought the rights to the 2010 Vancouver Winter Olympics and the 2012 London Summer Olympics in 2007 for $US100 million. Nine paid an estimated $US60 million and Foxtel’s three owners – Telstra, News Corp and Consolidated Media Holdings – paid $US40 million.

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The deal NBC Universal struck with the IOC this month was broadly in line with the $US2.2 billion the US company paid for the rights to the Vancouver and London Games.

“The new NBC deal means the price paid for the 2010 and 2012 Games will be the starting point for the negotiations for 2014 and 2016, and maybe beyond that," a media executive said.

“But at this stage, the IOC could struggle to get $US100 million from the Australian networks for the next two Games."

Under the current anti-siphoning regime, Olympics events have to run first on the free-to-air TV networks’ main channels but can run simultaneously on their digital channels.

The changes announced in November created two anti-siphoning lists: one covers events that must be shown on the main free-to-air TV channels, and the other covers events that can be shown first on the main or digital free-to-air channels.

The Olympics events are on the second list, giving the free-to-air networks the right to run them first on their digital channels. Nine, for example, could show first-run Olympics events on its Go and Gem channels.But even with three channels, the free-to-air networks would not be able to cover all Olympics events.

“Until we know what, if anything, pay TV companies will be allowed to show, it’s impossible to start putting valuations on the next lot of Olympics rights," a TV executive said. “If Foxtel think it is going to have less exclusive content, it’s not going to pay anywhere near $US40 million again."